“SKILLS potholes” are damaging the performance of parts of the Welsh economy, according to a new report.

The UK Employer Skills Survey, produced by the UK Commission for Employment and Skills found particular problems with skills in some industries and geographical areas of Wales.

Researchers for the study questioned more than 6,000 employers from across Wales. They found that the manufacturing sector has the highest level of skills deficiencies. Of those manufacturers questioned 22% have either a vacancy which is hard to fill for skills reasons or staff who are not fully proficient at their jobs.

Manufacturing businesses are the most likely to report a loss of business due to skills gaps among current members of staff, with 32% saying they had lost out on work because they lacked staff with particular skills.

Yet, despite this, the report found that employers in the manufacturing sector were the sector least likely to increase training in response to internal skills gaps (54% of manufacturers reported doing this compared to the Wales all sector average of 64%).

The report found that the business services sector – including professions such as accountancy and law – has the highest proportion of vacancies which are hard to fill for skills reasons.

The study also found that 39% of vacancies in the business services sector are hard to fill because applicants do not have the right skills.

When it came to geographical skills gaps the report highlights that recruiting skilled staff in Mid Wales is more than three times harder than in any other region of Wales. The report found that 59% of vacancies in Mid Wales are hard to fill due to skill shortages among applicants.

Scott Waddington, chief executive of SA Brain & Co and Wales commissioner to the UK Commission for Employment and Skills, said the evidence showed that some employers needed to take action to address skills gaps in their workforce.

“Many employers have fantastic systems in place to ensure appropriate staff training and strong talent pools of workers, but unfortunately almost as many don’t,” he said. “In some areas, sectors and occupations these skill gaps have caused ‘skills potholes’ to develop – an issue which risks slowing the country down on the road to economic growth if left ignored.

“Within Wales’ important manufacturing sector there is evidence to suggest that not enough businesses are taking action to deal with skills problems among their staff. This will inevitably affect their bottom line.

“If businesses wish to remain competitive, they must be prepared to take greater responsibility for developing training plans and understanding their skill requirements to address the challenges they face.”

Deputy Minister for Skills, Jeff Cuthbert said the report would inform Welsh Government programmes to improve skills within the Welsh workforce.

“We take the raising of skill levels very seriously,” he said. “That’s why we are working with employers to provide more apprenticeships and offer financial support for workforce development. This is an important report which gives us an invaluable insight into skills-related recruitment in Wales and how we compare with the rest of the UK.

“There are many positive points that we can take from this report and it is encouraging to see that in many areas Wales is holding its own compared to the other UK nations at a time of economic difficulty. However, there is still much to be done.

“Findings from across the report provide powerful indicators as to where we need to focus our efforts. This will be used as part of a body of evidence to inform our future employability programmes, workforce development activity and key developments that we already have in place.” The report also found that employers are generally pleased with the preparedness of education leavers recruited into their first jobs, with four in five employers that recruited higher education leavers reporting that they are well prepared for work.

Across Wales the proportion of employers experiencing skills shortage vacancies and skills gaps was in line with figures for the UK as a whole. Just under three in five (59%) provide training for their employees, with a further 22% providing broader development activities.